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1-Yr T-bill rises to 10.72%

Ceylon Today |15. 02.2019

 

By First Capital Research
Weekly Yield movement and Volume
The secondary market yield curve remained relatively unchanged; however, towards the latter sessions of the week, the yield curve shifted slightly upwards due to selling pressure witnessed on the belly end of the curve. The USD/LKR ranged between Rs 177.60-178.50, on the back of continued foreign buying interest in Government Securities witnessed previous weeks. At the primary bill auction held on 13 February 2019, total offered amount was accepted in one-year bill at a weighted average yield of 10.72 per cent, increasing marginally by 3bps from previous week with both the three-month and six-month being rejected.

 
Liquidity and CBSL Holdings
CBSL market liquidity remained negative throughout the week, although recorded a significant improvement compared to the previous week by narrowing the negativity during the week. Highest liquidity deficit for the week was recorded on 7 February, amounting to Rs 103.8B. Meanwhile, CBSL holdings remained relatively stable at Rs 176.3B.

 
Foreign Interest
Foreign holding was recorded at Rs 162.6 billion, recording an increase of Rs 11.5 billion, while witnessing foreign buying in government securities for the third consecutive week. Foreign holding percentage for the week improved to 3.1 per cent.

 
Maturities for next week
Government securities market has a Treasury bill maturity amounting to Rs 21.7 billion, which needs to be settled on
22 February 2019.

 
Daily summary
Thursday (07.02.19): The secondary market yield curve continued to remain broadly steady while market witnessed moderate volumes. Selling interest was witnessed on short-tenure 2021 and mid-tenure 2027 maturities, with [01.08.21] trading at 10.95 per cent, [15.12.21] at 11.00 per cent and [15.01.27] at 11.30 per cent and [15.06.27] at 11.35 per cent, while mixed activities were witnessed on mid-tenure [15.12.23] at 10.97-11.03 per cent levels.


Friday (08.02.19):
 The secondary market yield curve continued to remain mostly unchanged on the back of limited activities with moderate volumes changing hands during the day. Selling interest was witnessed on short-tenure [01.08.21] and [15.12.21] around 11.00 per cent mainly from local and foreign counter parties while limited activities were witnessed on [15.06.27] at 11.37 per cent.


Monday (11.02.19):
 Secondary market activities dried up as the market was at a complete standstill with participants adopting a wait-and-see approach ahead of the primary bill auction to be held on [13.02.19], while yield curve continued to remain unchanged from last week’s closing levels. CBSL is offering Rs 21.0 billion at this week’s primary auction consisting of three-month, six-month and one-year bills.


Tuesday (12.02.19): 
Secondary market saw moderate volumes compared to yesterday’s standstill state, while the belly and long end of the yield curve experienced an upward shift amidst selling pressure stemmed from foreigners. Foreign selling predominantly centered on mid-tenure, [01.08.26] at 11.30-37 per cent and [15.06.27] at 11.37-40 per cent while the following maturities reached intraday high with two 2021 maturities ([01.08.21] and [15.12.21]) at 11.00 per cent and 11.02 per cent, [15.12.23] at 11.10 per cent, [15.03.25] at 11.30 per cent with foreign buying was witnessed on [15.12.23] at 11.05-11.10 per cent levels.


Wednesday (13.02.19):
 Belly-end of the yield curve shifted slightly upwards prior to the primary bill auction held on 13 February 2019 while secondary market witnessed low volumes.
At the primary bill auction, total offered amount was accepted in one-year bill at a weighted average yield of 10.72 per cent, increasing by a marginal 3bps from previous week with both six-month and three-month were being rejected. During the day, short-tenure two 2021 maturities ([01.08.21] and [15.12.21]) reached intraday high of 11.05 per cent and 11.00 per cent, while mid-tenure maturities [01.08.26] traded at day’s high of 11.40 per cent and [15.06.27] at 11.43 per cent.

ASK THE RIGHT QUESTIONS BEFORE INVESTING

Kavin Karunamoorthy, Senior Manager of Asset Management at First Capital, reveals points to consider both for those already in the know and those hoping to cautiously test the investment waters.

Don’t put all your eggs in one basket!
As the age old saying goes, it is important that you understand that you should not put all your investments in one tool. Investment banks or wealth managers can help you manage and diversify your investments, while lowering risk and maximizing returns. Hence, it is important to seek out information from the correct sources.

Time and goals setting
Investors should consider four main points: First, they need to identify their short-term and long-term financial goals i.e. how and when does he need the money. Second, they need to plan the funding capacity i.e. understanding your ability to allocate funds for investment purposes either as a lump sum or on a monthly basis. Third, identify the investment time horizon that you have earmarked for your investments i.e. anticipate when you will require your funds. For example, you may require a monthly income after retirement as well as a lump sum to finance your children’s university education or buy a second house. Finally, evaluate your risk appetite and acceptable risk level. One needs to understand that higher the risk, higher the return, and similarly lower the risk, lower the return. A risk-averse investor may choose to invest in low risk fixed income instruments such as treasury bills and bonds, bank deposits, unit trusts and listed corporate debt. An investor with a higher risk tolerance could look at instruments such as the stock market, property and real estate, unlisted corporate debt, or derivatives.

As Sri Lankans what sort of investors are we?
We find that Sri Lankans are generally risk averse; this can be attributed to two factors, first, the lack of financial literacy, and second, the bad experiences of the previous years. However, you do find individuals that take risks and reap the rewards; after all, most of our top investors have taken calculated risks to be where they are today.

Still, in recent times, we have seen slight growth in interest from younger entrepreneurs and executives towards planning their retirement etc. We want to encourage this trend and create more awareness about the investment tools available at different income levels, so that even if they don’t have large funds in hand, they can plan and set goals to achieve their financial aspirations.

1

What the experts bring to the table
A professional wealth manager is able to give the investor an overall picture of the financial market, including its past, present and future cycles. It is the role of a wealth manager to provide investment strategies across all asset classes for individuals and corporates, while keeping track of market opportunities, recognizing trends and matching them to your interest, with a focus on performance, liquidity, risk management and other relevant factors.

Companies charge either a flat advisory fee or fees linked to performance.

Enlisting a wealth manager
If you have chosen to enlist the services of a professional wealth manager, in addition to acknowledging risk level, expected return and the period of investment, be sure to meticulously evaluate the instruments as well as the wealth manager’s credentials and the track record of the companies with whom you intend to place your hard-earned money, and don’t be afraid to ask questions.

In Sri Lanka, a wealth manager must be licensed and authorized by the Securities and Exchange Commission of Sri Lanka (SEC), in addition to owning the necessary proficiency and competencies in relation to investments and wealth planning. Finally, the approach that your wealth manager takes must be philosophically consistent with how you view the world.

The First Capital difference
We understand that not everyone’s requirements are the same, that is why we take the time to sit with our clients and map out their lifestyle, considering inflation and other economic, geopolitical and environmental factors that affect income and expenditure. Although it’s a time-consuming affair, it gets people excited because it shows them just how much they need to put aside for a comfortable future. Backed by over 35 years’ insights into investment trends and markets access, First Capital is in a unique footing with a 360-degree view of the financial market through the collaboration of in-depth knowledge from its primary dealer unit, stock brokering unit, corporate financial advisory, wealth management arm, research unit, structuring and placement arm, and regional branch network to provide holistic solutions for our clients. Additionally, our team comprises experts from the banking and finance industry, capital markets and the real estate industry, enabling us to service clients’ needs across asset classes.

Our focus is to provide our clients with a positive return, while safeguarding their capital. To this extent, we have strong internal risk management processes in place to monitor and ensure that every investment we make on behalf of our clients are within the parameters of the SEC, Central Bank regulation and our own code of conduct.

First Capital is the only listed and rated investment bank in Sri Lanka, reflecting governance standards and transparency. The company is rated Aby ICRA Lanka.

 

At First Capital we provide a multiple Wealth Management solutions for individual and corporate investors to achieve your financial aspirations.
Backed by over 35 years of expertise, insights to investment trends and markets access, First Capital’s professional fund managers, ensure that risks are diversified over a multitude of asset classes, to identify prudent investments to suit your investment goals.

Hiruni Perera, Senior Research Analyst , at First Capital commenting on the bond and equity market performance – 13.02.2019

Share Market Investment Sri Lanka

Hiruni Perera, Senior Research Analyst, at First Capital Holdings PLC commenting on the bond and the equity market performance on Ada Derana – 13.02.2019

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

Dimantha Mathew, Head of Research, at First Capital commenting on the bond and equity market performance – 12.02.2019

Share Market Investment in Sri Lanka

Dimantha Mathew, Head of Research, at First Capital commenting on the bond and equity market performance – 12.02.2019

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

Nisansala Kuruppumudali, Research Analyst, at First Capital commenting on the bond and equity market performance -10.02.2019

Stock Market Sri Lanka

Nisansala Kuruppumudali, Research Analyst, at First Capital commenting on the bond and equity market performance.

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka.
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

Dimantha Mathew, Head of Research at First Capital Holdings, Commenting on the Bond and the Equity Market Performance on Ada Derana – 07.02.2019

Investment in Sri Lanka

First Capital’s Dimantha Mathew Commenting on the Bond and the Equity Market Performance on Ada Derana

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

First Capital’s Dimantha Mathew with the Market Review on Ada Derana

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

Hiruni Perera, Senior Research Analyst, at First Capital Holdings PLC commenting on the bond market performance on Ada Derana – 05.02.2019

Investment in Sri Lanka

Hiruni Perera, Senior Research Analyst, at First Capital Holdings PLC commenting on the bond and the equity market performance on Ada Derana

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka.
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Dimantha Mathew, Head of Research at First Capital Holdings, Commenting on the Bond and the Equity Market Forecast on Ada Derana – 03.02.2019

Stock Brokers in Sri Lanka

First Capital’s Dimantha Mathew Commenting on the Bond and the Equity Market Performance on Ada Derana

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

First Capital’s Dimantha Mathew with the Market Review on Ada Derana

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

 

1-year T-Bill yield dips to 10.69 per cent

 Treasury Bills and Bonds in Sri Lanka

 

Nisansala Kuruppumudali, Research Analyst at First Capital Holdings PLC, commenting on the bond and the equity market performance on Ada Derana – 31.01.2019

First Capital’s Nisansala Kuruppumudali commenting on the bond and the equity market performance on Ada Derana

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.